Yahoo shutting down DMX

| Ad Networks

Approximately two weeks ago, I provided a contrarian perspective on the influence and impact of Right Media for AdExchanger.com. My central point being that, rather than being a vehicle that competed with ad networks, Right Media ended up being a major factor in the ad network explosion of 2006-2007 with DMX-the Direct Media Exchange.

On Monday, Yahoo officially announced that they were shutting down DMX in an effort to try to position the exchange as a more up-market solution. This is a significant announcement for two reasons:

1. DMX was the platform that many second- and third-tier ad networks built their businesses on. It provided access to inventory as well as an ad serving solution. Without DMX and particularly the ad serving capability, we may see the ad network shakeout that many have been predicting.

2. Yahoo would not be shutting down this business if it was an immensely profitable money maker. Closing DMX shows just how difficult the exchange business is.

We won’t have to wait long to see what happens as a result of this move. DMX will be officially closed in less than two months on January 31, 2010.

Eric Franchi

Eric Franchi is co-founder of Undertone and serves as senior vice president of business development, leading the company’s relationships with its most important partners. A respected industry leader, Eric has been featured in publications including Ad Age, Adweek and The Wall Street Journal, and on stages worldwide including IAB MIXX, Advertising Week and Cannes. He has held a place on the board of the Interactive Advertising Bureau (IAB) for several years, helping guide the digital advertising industry through a period of rapid growth and change.

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